I always study charts but over the last few weeks I have been studying charts like crazy. Trading has been quite challenging for me, so I had the need to keep my studies up. One of the trade setups that I have been studying is the Monster Capitulation setup. Michellle B., who used to post at Trade Mike’s site, wrote
this wonderful article some time ago. I find myself coming back to this article again and again because it is really good. (By the way, if anyone reading this post knows where Michelle B. might be hanging out these days, please send me an email at
2001anarco@gmail.com. I really would like to be in touch with her.)
The COCO trade today was an attempt to practice the capitulation setup. I would really like to master theses setups since there are always stocks in capitulation mode, which means there are always good opportunities. The annotations in the chart marked what I saw and how I executed the trade.
7 comments:
Anarco,
Nice trade today. I have been reading your blog for a while and I appreciate you posting everything that you do.
Thanks,
Tyler
What a coincidence! I read this article on Mike's blog about a couple of weeks before. It's excellent. I wanted to short COCO earlier in the day today but this stock was not on my broker's short list. I then entered long after capitulation based on this article.
Anarco,
Do you have any volume alerts in place?
nice entry after COCO fails to make a lower low in the orange box.
nice trading.
QQQBall
Thank you all. I am glad this one worked out and will try to continue experimenting with this setup.
daytradr: no. I do not have any volume alerts at this point but it would be nice to have them. I have not yet tested the trade-ideas scan, but I imagine they might have something like that. I am using IB as a broker and eSignal as my charting package and I am not sure they have any volume alert features.
Anarco - thanks for highlighting a new setup for us - I read over the links pretty quickly because my interest was trying to figure out how to locate potential setups - I did not get much of a clue how to look for capitulation setups. Do you have an idea how a scan would be setup to identify this type of setup?
Hey Tom~
I found this one because it was on my gap down morning scan but I do not have a way to scan for volume spikes or high percentage drop or anything like that. I have not signed up for trade-ideas yes, but they have an indicator called "running up" ("running down" is its counterpart) that might do what we need. If any of you have trade-ideas, let me know if that works for you.
Cheers,
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